The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.

The Outreach & Education function engages, empowers and educates the public in the Second District. Our outreach mission furthers the Bank’s commitment to the region by listening to the communities we serve and developing programs, analysis and sponsored conferences and clinics to help meet their needs. Our education mission aims to advance public knowledge about the Federal Reserve System and its role in the economy.

Restoring health to the small business sector, and the credit necessary to support its recovery, are continuing concerns. While recent surveys indicate an easing of underwriting criteria, data also show a 10 percent decline in small business lending between Q1 2010 and Q1 2011. The extent to which this drop is due to weak demand, impaired creditworthiness, or other factors is still under discussion.

The New York Feds Small Business Borrowers Poll takes a fresh look at borrower demand by asking firms not only about credit applications but also about reasons for not seeking credit. The results highlight the nuanced assessments that firms are making in formulating credit demands.

The poll finds that although 33 percent of firms sought credit and two-thirds were approved for a credit product, many firms chose not to apply because they were either paying down debt (19 percent), believed they would be turned down (27 percent) or already had sufficient credit (21 percent).

Credit applicants and firms with sufficient credit were similar in having larger revenues and sales increases in 2010 and in the first quarter of 2011. In contrast to these two groups are the 27 percent of the sample who did not apply because they believed they would be turned down. These discouraged borrowers attributed their decisions to concerns about low credit scores and insufficient collateral. A large majority of these firms reported flat or declining sales in the first quarter.

Nineteen percent of the sample did not apply because they were paying down debt. Their responses to questions about sales growth provide clues about why they prioritized deleveraging. Nearly equal portions of this group reported sales increases and sales declines, suggesting that some firms might be responding to broader economic concerns while others may be responding to weakened sales demand at their firms. Deleveraging firms tended to be smaller in revenues and employment.

Poll results also show that most firms rely on business earnings and personal/family wealth, but that credit use varies considerably across groups. Applicants and firms with sufficient financing frequently mentioned using lines of credit. In contrast, both deleveraging firms and discouraged borrowers are relying on credit cards.

The Small Business Borrowers Poll asks small businesses in the Second District about their business performance and financial and credit experiences. The poll is distributed through a network of civil and nonprofit partners. The poll represents the perspectives of smaller firms (typically fewer than 10 employees and under $5 million in annual revenues) who respond to the questionnaire.

In total, there were 876 poll respondents to the poll fielded in May 2011; however, it is important to note that the number of respondents to each individual question varied. The graphs featured on this page each identify the number of respondents (n=) for relevant questions. If the analysis required cross-tabulation of multiple questions, only firms which responded to all relevant questions were included.

Note: The poll is not a random sample and thus the information should not be interpreted as a statistical representation of small businesses in the Second District or the nation. Rather, the results should be viewed as suggestive and analyzed with awareness of potential methodological biases.

The Federal Reserve Bank of New Yorks Office of Regional and Community Outreach polled small businesses about their business performance, financing choices, and borrowing experiences. The poll was conducted online and distributed through a network of local government and nonprofit partners.

Arts & Business Council

Binghamton Economic Development Office

Binghamton Local Development Corporation

Brockport Small Business Development Center

Broome county Economic Development Zone

Broome County Industrial Development Agency

Broome County Industrial Development Corporation

Business Outreach Center Network

Catskill Watershed Corporation

Community Capital Resources

Connecticut Business and Industry Association

Dutchess County Chamber of Commerce

Dutchess County Economic Development Corporation

Empire State Development

Fulton Area Business Alliance

Fulton Street BID

Hanover Area Chamber of Commerce

Hispanic Chamber of Commerce

Hudson Valley Economic Development Corporation

Kings County Hispanic Chamber of Commerce

Long Island City Economic Development Corporation

Manhattan Borough President's Office

Manhattan Chamber of Commerce

Meadowlands Chamber of Commerce

Minority Business Development Agency, US Chamber Of Commerce

Myrtle Avenue Revitalization Program

Newark Regional Business Partnership

New Jersey Business and Industry Association

New Jersey Chamber of Commerce

New York City Council

New York City Department of Consumer Affairs

New York City Department of Small Business Services

New York Public Library

Niagara County

Niagara USA Chamber

NYC Business Solutions

Orange County Chamber of Commerce

Otsego Chamber of Commerce

Procurement Technical Assistance Center

Queens Borough President's Office

Queens Chamber of Commerce

Queens Economic Development Corporation

Rochester Business Alliance

Small Business Development Centers (NY)

Somerset County Business Partnership

Sunset Park Business Improvement District

Tompkins County Chamber of Commerce

Wayne County Business Council

Wayne County Economic Development

Westchester County Association

Williamson Chamber of Commerce

Women in Construction

Women Presidents' Organization

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